The Orissa government and the AES Corp-managed Orissa Power Generation Corp (OPGC) have agreed to ramp up the IB-Valley power station, bringing an end to a three-year long controversy.
?The OPGC will set up two units of 600 mw each in IB-Valley,? state energy minister Surya Narayan Patro said. According to him, while power from one unit will be completely dedicated to the state grid, power from the other unit would be sold by the company in the open market.
OPGC, which owned the IB-Valley Thermal Power Station (ITPS) with two units of 210 mw each at Banharpali in Orissa, was set up in the late 1980s.
The US utility giant AES Corp, however, took over the management of the OPGC by acquiring 49% stake from the state government in 1997. According to the programme, OPGC was supposed to put up two more units on sites III and IV.
Even though the foundation stone for the expansion project was laid in 2004, work could not commence owing to a tussle between the state government and the AES Corp. While the state government insisted for dedication of the entire power from the expansion project to the state grid, the American partner was advocating for selling of entire power generated from the expansion project in the open market to enjoy maximum price realisation.
Even the offer of the US utility company to dedicate 50% of the power to the state grid was rejected by the state government on the ground that it would also violate the PPA signed between OPGC and the state-owned transmission company, Gridco. Finally, the state government bowed agreed to the AES Corp?s proposal The cash-rich OPGC will invest over Rs 4,000 crore in the expansion project. With the completion of the expansion project, the total generation capacity of the company will become 1,620 mw.